16 October 2015

On 15 October, a U.S. Federal Court ordered former Timor-Leste legal adviser Bobby Boye to serve six years in prison and repay $3.51 million dollars to Timor-Leste. Although the plea deal effectively ends the criminal case against Boye, many questions remain unanswered regarding the full costs of his crimes to Timor-Leste, as well as who else may have been involved in his schemes. We hope that investigations proceed.

In 2010, Norway hired the Nigerian-American “tax expert” to help Timor-Leste’s Ministry of Finance collect petroleum taxes more effectively, and Boye recommended revising legal documents and filing assessments against oil companies which he said had underpaid their taxes. In 2011, Boye’s pay began coming from Timor-Leste’s treasury, rather than from Norwegian Aid. He supplemented it by inventing a fake company “Opus & Best” and awarding them eight million dollars in contracts from Timor-Leste for legal drafting services.

Boye’s scheme began to unravel in 2013, and U.S. authorities arrested him in June 2014, charging him with seven counts of conspiracy and wire fraud for payments totaling $3.51 million dollars that Timor-Leste had sent to “Opus & Best.” Media attention highlighted his conspicuous spending of his ill-gotten gains, using them to buy luxury houses, cars and watches. Unfortunately, we have not seen much interest in repairing the weak systems that allowed his scheme to take place, or in finding out if Timor-Leste officials were involved, either by conspiracy or negligence.

La’o Hamutuk began researching public sources, and we quickly learned of many events in Boye’s life which should have prevented his employment – being banned from trading stocks, forgery, personal bankruptcy while concealing assets, conviction and imprisonment for embezzlement, nonexistent legal experience, fake business registration, among other things. A Norwegian journalist unearthed further information about his fraudulent educational claims, references and employment history. In July 2014, La’o Hamutuk wrote to U.S. prosecutors, providing information which we believed would help them understand the case and investigate it more effectively.

In April 2015, Boye pleaded guilty to one count of wire fraud, avoiding 140 years of prison time, as well as a trial which could have brought more information to light. As negotiations proceeded on his sentence, we wrote to the prosecutors again, explaining that the cost of his crimes to Timor-Leste may have been fifty times more than the $3.5 million he stole directly.

On 15 October, U.S. Federal Judge Freda Wolfson sentenced Boye to six years in prison, followed by three years of supervised release. He will begin his prison time on 30 November, probably at the Fort Dix Federal Correctional Institution in New Jersey, a former U.S Army base. The court also ordered Boye to pay $3.51 million in restitution to the U.S. Treasury, to be distributed to Timor-Leste's attorney Pierre-Richard Prosper of the Arent Fox law firm. The payment is due immediately, although a schedule may be worked out. The Court generously did not require Boye to pay interest (which could be a million dollars or more) and ignored La'o Hamutuk's explanation that Boye's crimes could cost Timor-Leste $176 million.

La’o Hamutuk has compiled a comprehensive, updated web page on this case, with links to many legal and other documents. We hope that the competent, responsible authorities in Timor-Leste will use it to help find out which Timor-Leste laws were violated, what systems must be fixed, and who else was involved in Boye’s crimes.

Timor-Leste is one of the most petroleum dependent countries in the world: sales of oil and gas made up 73% of state revenues in 2014, and another 20% came from the investment of past oil income. However, in 2014, oil revenues fell by 40% compared to the previous year. This was partly a result of the fall in global oil prices, but was also largely due to the fact that production levels fell by 24% in the same period. Our oil is running out – production peaked in 2012, and will continue to fall as Kitan ends production this year, and Bayu-Undan ends around five years after that.

Timor-Leste is falling into the ‘resource curse’ – where states who depend on extracting non-renewable resources neglect sustainable alternative economic sectors because decision-makers believe that oil will last forever. They also fail to improve their people’s well-being by under-investing in public health, education and other essential services. As our oil deposits run out, more and more people inside and outside Government recognize that we must escape from petroleum dependency by diversifying the economy.

We need to consider carefully whether the Tasi Mane petroleum infrastructure project moves us in this direction – it will cost billions to implement, a significant fraction of Timor-Leste’s finite oil and gas wealth. This takes money away from health care, education, sanitation and agriculture, all of which are essential for improving quality of life, strengthening human resources and growing the non-oil economy. Also, these projects will take up valuable agricultural land, reducing productivity and continuing dependency on imports.

The following paragraph was revised after the meeting.

This public meeting began with presentations by Francisco Monteiro, President of TimorGAP and Juvinal Dias of La’o Hamutuk, followed by two hours of lively discussion among the 150 participants. They heard TimorGAP’s plans and dreams, as well as La’o Hamutuk's skeptical perspective (PowerPoint or PDF).